Britain to receive first US LNG delivery on Saturday

05 July 2017 14:26 Source:ICIS

The first LNG cargo from new US Gulf production will arrive into the UK’s Isle of Grain terminal on Saturday, 8 July, while a second tanker from Nigeria will follow on 14 July, according to LNG Edge on Wednesday.

The cargoes will arrive into a cheap British gas market at a time of limited spot demand from other global LNG importers.

They come with the UK in major pipeline export to mainland Europe.

The buyers of the two cargoes were not confirmed. The UK’s Centrica and BP, Spanish utility Iberdrola, Algerian producer Sonatrach, France’s ENGIE and Germany’s Uniper all hold capacity at Grain.

The Maran Gas Mystras, which sources said is chartered by Total, will deliver a cargo from the US Sabine Pass on 8 July. The vessel has a capacity of 159,800 cubic metres (cbm).

This will be followed by the 162,000cbm Adam LNG six days later. The vessel is chartered by trader Trafigura, according to shipping sources, and was originally bound for India via the Cape of Good Hope before changing direction on 30 June.

One trader said that high LNG stocks in India have reduced demand, with Indian buyers inactive on the spot market in recent weeks.

The trader said that a second US LNG cargo is currently uncommitted and could come to Europe in August.

“Europe is the only area able to absorb LNG, there aren’t many alternatives right now. India isn’t in the market and Algeria is producing well – it’s pretty bearish,” said the trader.

British exports

The Britain-Belgium Interconnector pipeline has been exporting record volumes to the European mainland since the start of July, propping up demand in Britain.

About 60 million cubic metres was nominated to flow through the pipe on Wednesday – roughly equivalent to the pipe’s export capacity – while current price signals suggest that this will continue in the coming weeks.

The projected arrivals will help to meet the high export demand, as shippers replenish gas stocks across Europe.

ICIS assessed the spot delivered LNG front-month August ’17 price at $4.48/MMBtu on Wednesday, the lowest of any market.

The NBP balance-of-month July contract settled at $4.75/MMBtu on Tuesday, a substantial discount to equivalent contracts at the Dutch TTF and German NCG – Europe’s two other largest hubs.

British prices have been pushed down by the closure of the country’s largest storage facility, Rough, which has curtailed injection demand. jack.elliott@icis.com

By Jack Elliott